Chocolate manufacturer and retailer Thorntons announced record sales in its centenary year, and said they highlighted its multichannel strength.
But while total revenues rose by 1.7% to £218.3m in the year to June 25, from £214.6m at the same time last year, pre-tax profits fell. Exceptional costs of £5.4m pulled pre-tax profits down by 38% to £4.3m from £6.9m at the same time last year.
Thorntons’ strategy of diversifying its sales channels, first set in place in 2006 when almost 80% of sales came through its shops, brought successes. Online sales rose 4.3% to £9.6m, while commercial sales to supermarkets were up by 25.9% at £78.8m.
But overall retail sales, which include store and online sales, were down by 8.2% as sales through its own stores, still its largest channel, fell by 8.9% to £118.3m, down from £129.8m last time. Franchise store sales fell by 10.8% to £11.6m.
Jonathan Hart, chief executive of Thorntons, said: “In the year that marks the centenary of Thorntons, I am pleased to report record overall sales, despite the challenging retail environment.
“This highlights the strength of our multichannel strategy as well as that of the Thorntons’ brand, with sales of branded products rising by 2.2%. Commercial sales have grown by an impressive 25.9% over the full year and we are encouraged by our forward orders for Christmas 2011.”
The company is now looking to rebalance its business over the next three years to create a “profitable and sustainable” retail estate, despite its predictions that High Street spending will remain weak.
“This plan,” said chairman John von Spreckelsen, “will create a profitable and rebalanced organisation, a customer-focused multichannel business and a revitalised brand.”
Chief executive Hart said Thorntons’ commercial channel, which sells to supermarkets, would become its main route to market over the course of the three year plan. He added: “Our Thorntons Direct [online] channel will continue to grow in line with the online gifting market. We will invest further in our website and in new customer relationship management systems as we start to align the direct consumer element of this channel with our own stores channel.”
Thorntons says it knows its core customers, who buy from it through many channels, well. But while on average its customers buy from it five times a year, just under half do so only once or twice. “Our key customer objective is to encourage existing customers to visit and purchase more frequently,” said Hart. “Achieving just one extra visit and purchase per year would transform our own stores business.”
